NZ commodity prices fall in November, led by weak dairy

Friday 4th December 2015

New Zealand commodity prices fell in November, led lower by weak dairy prices.

The ANZ Commodity Price Index slid 5.6 percent in November, snapping two months of gains. The index is 15 percent below year earlier levels.

November's decline was led by falling global dairy prices, which slid 9.4 percent. Dairy prices have weakened this year, as increased supply and lacklustre demand weigh on the market.

"The decline centred on New Zealand's key exports of milk powder and butter," ANZ Bank New Zealand agri economist Con Williams said in his report. "High global milk supply, general bearish commodity sentiment and fairly lacklustre import demand from China continues to weigh heavily on the market."

Cheese and casein prices were little changed, he said.

Outside of dairy products, export prices fell 1.8 percent in November and are 16 percent lower than year earlier levels, according to the report.

Beef prices slid 9.3 percent in the month and have dropped 24 percent since August as high US inventory levels built up from imports, domestic US supply increased and as competitive pressure from alternative meats weighs on consumption, the report said.

Meanwhile, wool prices declined 2.5 percent in November and aluminium shed 3.1 percent.

Prices for logs and skins advanced, bucking the trend.

Meanwhile, the decline in the New Zealand Dollar Index was more muted due to a weaker kiwi dollar, down 4.5 percent in the month and just 1 percent below year earlier levels.

The lower New Zealand dollar helping deliver New Zealand dollar price rises for five commodities, ANZ said.

BusinessDesk.co.nz

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